Solar Power and Feed-in Tariffs

Justin Tomlinson Excerpts

Tuesday 29th March 2011 Westminster Hall

[Alex Cunningham]

I am not aware of any policy that has been so successful so quickly, and I know that across the north-east of England, many jobs have been created as a result of that policy. Many more jobs could be created, but that could change under the Government’s change in policy.

The aspiration of the industry—and, I hope, the Government—is to bring the technology to the point where renewable energy will compete with grid electricity without subsidy. To put the matter firmly on the record, I have been told that even BP concedes that electricity from solar PV will be cheaper than fossil fuels by 2020—a startling and very welcome statistic. To be clear, the Government’s decision to significantly reduce the tariff for schemes that are larger than 50 kW will cause havoc in this fledgling industry and make it less likely that community groups and schools, hospitals and churches will contemplate solar energy schemes, as they will simply be unaffordable. Schemes over 50 kW in size will see the feed-in tariff reduced by between 39% and 49%.

[Justin Tomlinson (North Swindon) (Con)]

If money is to be limited, does the hon. Gentleman agree that it would be best to prioritise larger-scale projects that offer a better return for the taxpayer and help to achieve our goal of increasing renewable energy?

[Alex Cunningham]

I will come on to some of those specific issues about the size of projects and the tremendous fear that the Government seem to have about larger projects, which could be controlled in the way that the hon. Gentleman mentions.

A 50 kW scheme is not a large scheme in any way, shape or form, despite what the Government would like us to think. We are talking about an area that is just the size of two tennis courts—hardly the large solar farms that the Government claim to be worried about. But do not just take my word for it. The Government should be listening to the Renewable Energy Association, which says that the industry has been “strangled at birth”, and to the Solar Trade Association, which calls the decision “a total disaster”.

The fact is that solar energy is hugely popular. A study of public attitudes to energy generation technologies that was undertaken by Cardiff university last year showed 88% support for solar PV. It had the highest level of support of all technologies. More than 70% of people agree that supporting renewable energy sources such as solar or wind is a better way of tackling climate change than nuclear power.

Back in 2008, the hon. Member for Wealden (Charles Hendry), who is now a Minister of State in the Department of Energy and Climate Change, stated when speaking about 5 MW projects:

“The idea behind it is to allow the inclusion of non-commercial scale projects, such as those that will be installed by homeowners, small businesses, local authorities, community groups, farmers and others. That would help out hospitals and schools that want to facilitate greater use of renewables and ensure low emissions as part of our 2020 targets.”—[Official Report, 18 November 2008; Vol. 483, c. 144.]

I cannot understand why the Government’s policy now goes against that very sensible statement. The Government are trying to present the decision as a choice between supporting home owners who want to install solar PV panels, and supporting big, commercial-scale schemes. The reality is that many community groups interested in medium-sized schemes—you know, the big society—will also lose out thanks to the proposed changes to the feed-in tariff.

In my constituency, a local project at the Norton sports complex has been hit hard by the Government’s decision. The complex was due to secure much needed funds through the FIT by using some of its previously unused land to install solar PV panels. The project was expected to be 1.5 MW in capacity, meaning that, thanks to the Government’s changes to the FIT, it will no longer be viable. I cannot emphasise enough what a disappointment that is. The Norton sports complex does tremendous work in the community, providing sporting and social facilities to local people, but has faced a difficult financial situation in recent years, as attendance at the social club part of the complex, which raises the money, has fallen by 60% thanks to the difficult financial circumstances in which many local people currently find themselves; many are out of work.

The chairman of the Norton sports complex was optimistic that FITs would provide a long-standing income for the complex and guarantee its future, but it will now have to go back to the drawing board, as the Government have pulled the rug out from under its feet.

[Justin Tomlinson]

I agree with pretty much everything that the hon. Gentleman is raising. He makes the point that a lot of time and money have already been invested in chasing a scheme for which the rules have suddenly changed. That puts groups such as the one that he has highlighted in a very difficult position.

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[Mr Vara]

I am grateful to the hon. Gentleman for his contribution. I remind everyone that we are in difficult economic times. Every area has to be looked at, including this one, where the review has been brought forward. We are keen to emphasise that there is no cut-off up to 50 kW. That will cover the majority of the domestic market, which we are keen to protect. I hear what the hon. Gentleman and the hon. Member for Stockton North have to say, but I am keen to emphasise that there is a cut-off point, which will ensure that, to a large extent, the domestic market is protected.

The renewable heat incentive, which will go ahead in 2011, represents more than £850 million of investment over the spending review period. That will drive a more than tenfold increase of renewable heat over the coming decade, shifting renewable heat from a fringe industry firmly into the mainstream. To prioritise those critical projects, we have needed to take hard decisions, reducing budgets to focus on the most important, and looking to reduce the burden on the bill payer. We will save money on support for small-scale electricity through feed-in tariffs, to prioritise the most cost-effective technologies and maximise value for money.

[Justin Tomlinson]

I understand the difficulty with pressures on budgets and the need to get the best return for the taxpayer. Surely the larger-scale schemes offer the better return to the taxpayer in terms of renewable energy produced and cost to install. Surely we should be considering those as a priority, perhaps at the cost of the domestic schemes.

[Mr Vara]

Clearly, many will argue that the domestic market has a priority; others will argue in the same way as my hon. Friend. A decision has been taken, though clearly this will be reviewed regularly. It is not definitive, it is an ongoing matter.

Fuel Prices and the Cost of Living

Justin Tomlinson Excerpts

Wednesday 16th March 2011 Commons Chamber

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

I am delighted to speak in this debate, which is an important opportunity to highlight the real difficulties faced by people the length and breadth of the country as a consequence of the record price of fuel at the pumps and the squeeze that is being forced on people’s incomes by the Government. Those issues, along with the reckless pace of public spending cuts, are the concerns most widely raised by people in my constituency, and it is easy to understand why. The area has significant economic challenges, which are being made much greater in the current climate by the Government’s approach to the cost of living.

Unemployment in West Dunbartonshire is higher than across the rest of Scotland and the UK. According to the latest figures, published today, the local claimant count has risen to 6.5%, compared with 4.3% for Scotland and 3.8% for the UK as a whole. Recent analysis of pay across Scotland has highlighted that wages in West Dunbartonshire are 11% below the Scottish average, and of course unemployment and low pay have a clear relationship with poverty. West Dunbartonshire has a disproportionately high number of people living in deprivation, and people living there have a disproportionately low life expectancy. I say that not with pride, but to try to communicate to the Government the challenges found in areas such as mine—challenges to which they have seemed impervious, particularly in this debate.

West Dunbartonshire has a high percentage of people employed in the public sector. Of course, the Government are slashing jobs in the public sector; they seem to believe that the private sector will magically rush in to fill the gaps in employment. The last thing any business needs to contend with at the moment is record fuel prices. Far from growing the private sector, they may mean that even more people lose their jobs. Just this afternoon, the owner of a delivery business in my constituency contacted my office to outline the impact of record fuel prices on his business.

Given all those factors, it is clear to see why people in West Dunbartonshire are struggling to afford the squeeze on their family budgets and businesses as a result of record fuel prices, rising inflation, and cuts to the help for families on low and middle incomes.

[Justin Tomlinson (North Swindon) (Con)]

I agree with the hon. Lady’s comments on the effects of high fuel costs. Does she agree that there should be some regret for the Labour Government’s 12 fuel duty increases?

[Gemma Doyle]

There should be regret that this Government have raised VAT to 20% with no regard for people in my constituency. Never before have people in West Dunbartonshire been forced to pay £1.36 for a litre of unleaded or £1.43 for diesel, as they do now at some local forecourts. Every time they make a trip to the filling station, they find that it costs them a bigger share of their income to fill up their car.

As we know, the recent spike in the price of fuel has been driven in part by rising world oil costs, especially as a consequence of the crisis in the middle east, but the Government have heaped unnecessary extra pain on people by hiking VAT to 20%, adding 3p to a litre of fuel. It is astonishing that the Government have acted so callously in driving up the cost of fuel, given the pre-election promises made by both the Conservatives and the Liberal Democrats last year. I am sure that I am not the only Member who saw leaflets promising action to keep fuel prices down circulated at the last election by one or both parties, although to the best of my knowledge, the Lib Dems did not even bother using their Royal Mail freepost in my constituency in the election last year.

That the price of fuel at the pumps is now at a record level as a consequence of the Government’s actions is an unforgivable betrayal, but that is of course something that we are getting used to from the Government. The attack on ordinary families’ standard of living goes much further than rising fuel prices driven by the actions of this Government. The VAT hike will cost families with children around £450 a year. Unfair cuts to tax credits, child benefit and housing benefit will further erode the incomes of families who rely on that support.

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[Andrew Percy (Brigg and Goole) (Con)]

I can assure the hon. Member for West Dunbartonshire (Gemma Doyle) that I am not a millionaire. I would, in the words of Travie McCoy, quite like to be a billionaire, but I do not expect that will happen. There are plenty of rich people on the Opposition Benches—people in glass houses and all that.

We should begin by recognising that over the past couple of decades, Governments of all shades have hiked up fuel duty and, broadly, people have been in general agreement with that because it has been seen as a green tax. That is why it was created. An injection of honesty is needed to counteract the feigned anger that has suddenly appeared and the damascene conversion that has taken place among Opposition Members. Everybody supported fuel duty rises over the year, and their position lacks credibility.

I agree with much that is in the Opposition motion. We all have concerns about fuel costs. Obviously I do not agree with the part that asks us to do something that is illegal under EU law. My radical solution to that would be to leave the European Union, but that is a debate for another day. Before we accuse the Opposition of cynicism, it is incumbent on those of us on the Government Benches to prove that the pledges we made at the general election were not cynical. That is why I look forward to the Budget, on which the Chancellor and Chief Secretary are working so hard, and I look forward to the answers on fuel duty. I hope they include a fair fuel duty stabiliser.

I dished out leaflets to the good voters of Brigg and Goole—hounded them with leaflets, one might say—on the fuel duty stabiliser. I supported it, knowing of the work that had gone into that policy at Conservative central office. I look forward to the Budget next week, when I hope we will hear more details about stabiliser. The price of fuel is having a massive impact on my constituents across north Lincolnshire and east Yorkshire. I note the proposals in relation to the islands and I heard the comments from the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). He has been a passionate advocate on behalf of his constituents. I would say to him if he were here—I know that he is off trying to save coastguards, and I wish him the best of luck on that too—that the effect of fuel prices is not limited to the islands.

Constituents such as mine have to travel an awful long way to their places of work. I represent a largely rural constituency, and most of my constituents travel considerable distances, whether to Lincoln, Leeds, Hull, York or Doncaster. Much of the time they sit in traffic, which is not good for fuel consumption, I am told. The pressures that affect the islands of Scotland and the Scilly Isles affect our constituents too.

[Justin Tomlinson]

I echo the comments of my hon. Friend. My constituency, North Swindon, has a considerable number of commuters who have no choice but to travel by car. The increased fuel costs impact on them as well.

[Andrew Percy]

I thank my hon. Friend for that intervention. What we are both saying is that if any solution is applied to one part of the United Kingdom, it must be applied to other parts of it as well. If we are all about fairness, as I am sure we are, it must be a solution that is fair to everybody in the United Kingdom.

Bank Bonuses

Justin Tomlinson Excerpts

Tuesday 11th January 2011 Commons Chamber

[Mr Osborne]

Where is the fairness in a record budget deficit? That is what we have to address. We are taking difficult measures; I know that every single one is opposed by the Opposition, who created that deficit, but that says more about them than it does about our plan.

[Justin Tomlinson (North Swindon) (Con)]

What percentage of bankers based in the City of London are British citizens, and therefore taxed at the higher rate on their bonuses?

[Mr Osborne]

Two hundred and fifty thousand people or thereabouts are eligible for the 50p rate, which came into effect in April. As I have said, other taxes, too—such as employers’ national insurance—are levied on bonuses, and in the Finance Bill, which we have published in draft, we have taken specific measures, on which we will seek to legislate later this year, to deal with some of the avoidance practices in the financial sector that were allowed to proliferate under the previous Government.

Treasury

Justin Tomlinson Excerpts

Tuesday 21st December 2010 Commons Chamber

[Justin Tomlinson (North Swindon) (Con)]

First, I wish all a wonderful Christmas.

As my contribution has been transferred from the education category to the Treasury category, I will take full advantage of the Treasury’s love of statistics and utilise them well in my speech. As my requests are generally related to the Department for Education, with a sparkling of festive spirit it will be nice and easy to secure agreement on all my requests.

I strongly believe that we have a duty to ensure that young people are equipped to make informed financial decisions. I congratulate my hon. Friend the Member for Congleton (Fiona Bruce), who made an excellent speech on the subject. I have been working with the Personal Financial Education Group, the Consumer Financial Education Body, and Martin Lewis of www.moneysavingexpert.com to set up an all-party parliamentary group on financial education for young people.

The purpose of the APPG will be to provide a medium through which MPs, peers and organisations with an interest in financial education can discuss the current provision on financial education in schools; ensure that young people are equipped to make informed financial decisions; help make resources and qualifications available to young people in education; support schools in the delivery of financial capability; and encourage the introduction of a requirement on schools to provide financial education.

Recent studies have shown that 94% of people think that financial education for young people is important in the current environment. Society is changing, making financial education ever more important. This year for the first time we saw that debit card use overtook the use of money. Long gone are the days when people were paid weekly in cash and were able to budget to the point where they ran out of money. We now have more direct debits, more standing orders and more contracts. Having been a councillor for 10 years before becoming an MP, I saw among the residents whom I represented that many of those unfortunate enough to lose their job would quickly be overwhelmed by the outgoings from their bank account, even when they thought that they were not spending any money.

We receive increasingly complicated marketing messages. One point that was highlighted to me was the worrying number of people who think the higher the APR, the better. Young people will never be able to get 100%-plus mortgages or to repair past financial mistakes through rising house prices and start again. In these challenging economic times, 69% of parents are concerned that their children will get into debt in the future. Less than a quarter of parents feel very confident about educating their children in how to manage money.

This was brought home to me last Friday when I and my hon. Friend the Member for South Swindon (Mr Buckland), with whom I share an office, held a training day with Citizens Advice, R3 and Nationwide building society to train us as MPs and our staff in how to deal with people who are in financial difficulty. Sixty per cent. of Citizens Advice’s work relates to debt and benefits, with the average client owing £16,970, which would take an average of 93 years to pay off at a rate that they can afford. I am sure all MPs share my concerns about the impact of debt. Interestingly, 91% of those who admitted to financial mistakes believe that financial education could have helped them avoid making those mistakes. I am sure a few MPs were included in that survey.

I believe schools have an essential role to play, and that is widely supported. Some 91% of teachers and parents agree that it is important that children learn to budget from a young age.

[Andrew Percy (Brigg and Goole) (Con)]

I pay tribute to my hon. Friend for the cracking work he is doing in establishing the APPG. Does he agree that what we need to do better in schools is not only encourage young people to take qualifications, but mainstream financial education into the curriculum? One idea from a head teacher at Goole was that we should include it on the curriculum as part of functional maths.

[Justin Tomlinson]

I thank my hon. Friend for that point. He has already put his name on the APPG list, and he will have a very important role to play in it. I hope many other MPs will put their names down too. Through working with teachers and teacher organisations, we will find the best way to engage with young children. Young people will support that too, as 97% of 11 to 17-year-olds think it is important to learn about money in school. School provision for personal financial education is still patchy, however, and 72% of parents think not enough has been done in the past to educate children about financial matters.

While there are many examples of excellent work, often led by the PFEG or banks and building societies, far too many schools have no, or extremely limited, provision. Through the APPG, we want to drive up standards and participation. Ideally, all children should have access to standard, consistent and engaging provision, but in the meantime we must do all we can to maximise participation.

My Christmas wish is for Members to join the APPG. I am sure all Members have their pens poised, so I will inform them that the group’s official launch will be on 31 January between 4.30 pm and 6.30 pm in the Jubilee Room, with Martin Lewis from MoneySavingExpert. I am aware that piles of Christmas cards will currently be covering hon. Members’ desks, but among them is an invitation—it will already have landed—so I ask them to keep an eye out for it.

As part of the group’s work, we will be looking to promote a balanced response. There are many different challenges ahead. Everybody is broadly supportive, but we must progress in a way that everybody can get behind and support. We have therefore been working with over 30 organisations, including banks and building societies, financial institutions, charitable organisations, schools and teaching organisations and, as I have said, Martin Lewis of MoneySavingExpert with, crucially, his 6.4 million subscribers, who will be encouraged to support this scheme.

At Christmas families face the greatest temptation to make the wrong financial decisions, so now would be a great time for us to make a difference. We should imagine what a difference it would make to our casework if people were able to make better and more-informed decisions.

[Several hon. Members]

rose—

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[Mr Umunna]

I do not wish to pre-empt the inquiry being carried out by the Treasury Committee. I have some sympathy for those views, but I would like to continue to hear the evidence that my Committee is taking on this matter and read some of the submissions to the Independent Commission on Banking before coming to a firm view.

The fourth argument that I make in favour of mutuals is that they have strong local links and roots in local communities. Mutuals are often regionally based and therefore often have a better understanding of those they seek to serve because they understand and are rooted in those communities. Finally, mutuals will undoubtedly help to promote competition. As I have mentioned, building societies do not have to pay dividends to shareholders, so they can use their funds either to pay higher savings rates or provide lower mortgage rates. It is no surprise that they regularly top the “best buy” tables.

[Justin Tomlinson]

As the Nationwide building society’s head office is in Swindon, I fully support the points that the hon. Gentleman is making. To further strengthen them, may I say that the lack of competition will lead to higher costs and charges for customers?

[Mr Umunna]

I thank the hon. Gentleman for that intervention. I do not wish to speak for too long, so I will just conclude by talking a bit about Northern Rock and Bradford & Bingley. As we all know, Northern Rock was nationalised on 18 February 2008, having been demutualised in 1997. After it demutualised, it had moved away from the traditional mutual business model and famously came unstuck in the summer of 2007. Likewise, Bradford & Bingley was taken into public ownership on 29 September 2008, having demutualised in December 2000. It, too, had run into trouble at the height of the crisis. For all the reasons that I have mentioned, we should remutualise Northern Rock and Bradford & Bingley as soon as we can.

In answer to a written question on 3 November, the Financial Secretary to the Treasury, who I am disappointed to see is not present, given that he was here for Treasury questions earlier, said:

“The Government have made it clear that they are not a permanent investor in UK banks and that their intention, over time, is to dispose of all the investments in an orderly way.”—[Official Report, 3 November 2010; Vol. 517, c. 825W.]

So I ask the Minister who is here, what is the Government’s current view on the issues that I have raised? Are the Government open to remutualisation as a way of meeting their promise in the coalition agreement to promote mutuals? If not, why not? How else do they propose to promote mutuals as promised? Has the Treasury carried out a feasibility study of the remutualisation of Northern Rock and of Bradford & Bingley? If it has not, I call on the Government to do so and publish the findings of that study, so that we might have a proper national debate on the issue.

If the Minister is unable to reply to my detailed questions today, will he undertake to ensure that the Financial Secretary to the Treasury provides me with details of the same? I cannot emphasise to the House how important I think those issues are, because if we are serious about ensuring that our constituents do not have to pay the price for the global financial crisis that in turn contributed to and caused the recession, we as a collective absolutely need to get a grip on such matters.

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[Mark Pawsey]

My hon. Friend makes a fair point, but somebody in the older age group has drawn the issue to my attention, and I shall go on to mention how it affects not just those people but others.

It is true, none the less, that those most resisting change are older residents, such as Miss Keats, who often do not have internet access or are uncomfortable with the open-ended commitment of a direct debit, which involves a supplier, frequently a large, faceless corporation, being able to put its hand into their bank account.

I am myself of a generation that grew up with a cheque book, and I do not wish to see them go, despite having seen cheques used inappropriately; I am thinking about the idiot in the student union bar who, rather than taking out some cash, insists on paying for half a pint of bitter with a cheque, to the irritation of other customers and bar staff alike. It is clear that people generally do not want cheques to go. For settling an account with a provider of goods or services, sending a cheque is a simple and easy method of payment—not least because the cheque book stub is a convenient reminder of which bills have been paid.

Charities in particular do not want cheques to go; they fear that that would mean a decline in their incomes because many of their donors are nervous about other methods. Small businesses do not want them to go either, because it is easy to reconcile accounts when payments are made by cheque, often with invoice numbers written on the back.

[Justin Tomlinson]

I fully support that point about small businesses. As one who has spent many years reconciling accounts, I think that too often internet bank accounts do not show the full details, while it is always crystal clear who a cheque has come from.

Independent Financial Advisers (Regulation)

Justin Tomlinson Excerpts

Monday 29th November 2010 Commons Chamber

[Mark Garnier]

My hon. Friend will not be at all surprised to hear that there are a number of surveys. Which? Undertook a survey that showed that 85% of people would prefer to pay fees, yet a survey by Harris Interactive showed that only 6% of the public said they would be happy to pay fees as opposed to commissions. That is a big problem, I think.

In future, customers will need to agree a fee with their adviser. That means that no longer will a client pay for advice via a commission charged on a transaction.

[Justin Tomlinson (North Swindon) (Con)]

I congratulate my hon. Friend on securing this excellent debate. Does he agree that if it is believed that commission makes advisers more inclined to promote products with higher commission, the same would surely apply to banks that offer their staff product sales incentives? Should changes not be consistent across the sector?

[Mark Garnier]

Yes, they should, and it is fair to say that the FSA is looking at the whole sector.

At the moment, every client is given the option of paying for their advice via a fee or commission. Since 1991, every client of every IFA has been given full details in writing of the adviser’s commission, and the overwhelming majority of clients elect to pay by commission. During that period, the market share of the IFA sector has increased from 29% to more than 65%—based on commission charging—with consumers demonstrating a clear understanding of and preference for independent financial advice. It should be noted that independent advice is not the preserve of the wealthy. Some 60% of IFA clients are ranked as C1 or below. If consumers are forced to pay a fee for advice, it is inevitable that many who would benefit from independent advice will not seek it, resulting in only the well-off accessing a significantly reduced IFA sector. The subject of commissions is extensive and I am sure that many hon. Members will want to expand on it in their speeches.

Banking Reform

Justin Tomlinson Excerpts

Monday 29th November 2010 Commons Chamber

[Justin Tomlinson (North Swindon) (Con)]

Does my hon. Friend agree that it is also essential to maintain diversity in the financial services sector to improve competition and drive down consumer costs and charges?

[Andrea Leadsom]

Absolutely. I was about to make exactly that point. Not only have there been far too few new entrants, we have seen only recently that banks are unable to fail; we cannot risk allowing a bank to fail, as the situation in Ireland has highlighted yet again. Regulation has trumped competition for too long.

It is not simply a matter of being too big to fail. Some of the biggest continuing concerns are about the medium-sized banking sector in the States and in Germany. The same mistakes must never happen again. We need to look to where the next crisis will come. It is absolutely key to introduce more competition and more accountability, and I would consider three areas.

I should not look to split retail and investment banking, which are artificial barriers. They may have worked in the 1920s and 1930s, but now they are too big a grey area. We simply could not do it. Bankers would just find clever ways to get round such measures.

I declare an interest. I have been in banking even longer than my hon. Friend the Member for Bromsgrove (Sajid Javid), as I have been in investment banking and funds management for 23 years. I assure the House that I have seen from all ends how clever bankers are when they want to get round something.

To address competition in the retail and mortgage markets, I would consider ways to let account numbers follow the consumer—one of the biggest barriers to moving an account, as we probably all know. I should love to know how many Members in the Chamber have changed their bank account or mortgage account recently. It is a huge headache. If we let the account number follow the consumer, that would immediately create far greater competition and far greater choice and availability of moving. It could also remove barriers to entry.

Secondly, to address competition in wholesale markets, I would consider giving the new Consumer Protection and Markets Authority a specific competition objective, which would mean that one of its roles would be as a specialist competition commission—not just the Office of Fair Trading, but a specialist commission—that would consider whether, in a particular sector or in a particular geographic region, a bank had a monopolistic or oligopolistic market share. It ought to have a statutory ability then to enforce its recommendations.

Autumn Forecast

Justin Tomlinson Excerpts

Monday 29th November 2010 Commons Chamber

[Mr Osborne]

I completely agree with my hon. Friend, who has been a powerful champion of the east midlands and of her constituency in the few months since her election. I know that she will welcome the announcement by Glaxo, which is because of the decisions that we have taken. Of course, the support for job creation in the east midlands and across the country would not be there if we had a fundamentally unstable economy of the kind that this Government inherited in May.

[Justin Tomlinson (North Swindon) (Con)]

What measures are being taken to maintain the low interest rates that are essential to mortgage holders in my constituency?

[Mr Osborne]

The Bank of England Monetary Policy Committee sets interests rates, and does so independently. The purpose, in part, of the measures that we have taken to reduce the deficit is to give the Monetary Policy Committee the maximum possible flexibility and freedom in setting the appropriate monetary policy to stimulate demand in the economy. I believe that that has enabled it to keep interest rates low, which helps to stimulate the economy.

National Insurance Contributions Bill

Justin Tomlinson Excerpts

Tuesday 23rd November 2010 Commons Chamber

[Anne Marie Morris]

I thank the shadow Minister, but that is precisely my point. I would like to ask the Treasury and the Treasury team to extend the provision to those businesses in the fullness of time.

In particular, we should clarify what we mean by a micro-business. The European Union defines it as a business with 10 employees and a turnover of less than £2 million. For my money, that is a very big business. In my part of the world, micro-businesses are really very small. The hon. Member for Dundee East (Stewart Hosie), who is no longer with us, suggested that we might think about a small business of two employees that was considering adding one extra employee. The point was that it is a big step for a sole trader or husband and wife team to take on that extra member of staff, and it is there that we need the help.

I suggest that the Treasury urgently considers extending the provision to micro-businesses, not in this Bill but in a future Budget. I cannot see why micro-businesses should not be covered across the country rather than in regions. My plea is that micro-businesses, which are different to small businesses, should be properly represented and that we should consider what we in this Parliament mean by a micro-business rather than necessarily taking the European definition. We should also consider what help we can give them.

As for the point made by the hon. Member for Ilford South (Mike Gapes), it is not just about tax assistance, but about regulatory assistance. Some very small businesses are drowning in legislation, much of which is simply not appropriate for them.

[Justin Tomlinson (North Swindon) (Con)]

My hon. Friend is making some excellent points, which, as someone who used to own a small business, I recognise. Micro-businesses also have the opportunity to take on apprentices, and we should encourage small businesses to take advantage of that.

[Anne Marie Morris]

I thank my hon. Friend for that contribution and I absolutely agree.

I ask the Treasury team and the Minister, after the successful outcome of this measure, urgently to consider extending it in the next Budget to micro-businesses and to introduce a proper definition of a micro-business. I think that they need particular help and support.